Wines sales buoyant at the Co-op

12 August, 2016

Wine sales at The Co-operative Group are buoyant following the roll out of a new ranging system in the spring.

In March 2016 the retailer implemented its most complex range review ever, following a year of intense research into the diverse shopping habits of its 12 million customers across an estate of more than 3,000 stores.

Stores are now stocked according to local demographics rather than a one-size-fits-all method, and the change is paying off. Volume sales are up 4.7% for the three months following the changes (Nielsen, 12 weeks to May 21, 2016) and Simon Cairns, Co-op trading manager for BWS, is cautiously optimistic about the strategy.

“It’s starting to come to life, it’s exciting to see where the growth is coming from,” he said. “We’re still learning and the range is still evolving. Our ambition is to get the right product fit in the right stores – that way we can really stretch the role and importance of convenience shopping for wine.”

The latest Nielsen stats reveal growth of 3.9% in volume and 2.6% in value at the Co-op, against a UK wine market showing overall 3.7% volume and 3.4% value decline. This is the fourth year of sustained growth for the Co-op’s wine category, which has upped its share of market to 9.7%.

Early indications after the range review show that growth is coming from increased frequency of shop and a boost in shopper numbers.

However, Cairns is conscious that the next challenge has to be conversion, to ensure that those new customers return.

“They need to be able to find products that are appealing
to them, both in terms of style and in reply to their shopping needs for that particular buying occasion,” he said.

Stores are now ranged not simply by demographic, but by customer shopping needs. While urban stores with a younger customer profile may have a bigger focus on South America and South Africa, in smaller towns with wealthier and older shoppers, an increase of SKU count of wines from classic regions such as Rioja and Bordeaux has been implemented.

The average price point for wine has dropped to £5.49, down 2%, which Cairns attributes to a deliberate move towards EDLP. He stressed there needs to be ongoing value so that shoppers don’t have to wait for a promotion to get the wine they want at any given price point.

However, he is also keen
to highlight the growth in the premium sector, with sales of Château Senejac up 40% and Château Floridene up 106%. “We want customers to trust us to spend a bit more and to know that they won’t be disappointed,” he added.

The review has served to reinforce the Co-op’s Fairtrade credentials, with like-for-like Fairtrade wine sales up 27%.

As Cairns predicted in March, an increased focus on the Old World is showing signs of success, with French and Spanish sales growing by 15%. Italy continues to perform strongly, with new stars of the Truly Irresistible range Fiano and Barbera both almost doubling sales in the past four months.

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